AML / CTF Policy
In anticipation of falling under AML/CTF Act regulation, Ausfinex follows what is required of a reporting entity today. Our customer due diligence requires us to know our customer (KYC) by having a record of the name, residential address and date-of-birth. We use a modern biometric verification system such as facial recognition to verify our customers. We have various Anti-Money Laundering (AML), Counter-Terrorism Financing (CTF) and Fraud Prevention measures in place which are designed to help us, monitor, detect and prevent these attempts.
Since the 4th of April 2018 Ausfinex has become a Registered Digital Currency Exchange, we are bound by Australian law to ensure the service we provide does not facilitate money laundering or terrorism financing. Our decision to enforce this policy reflects our desire to prevent money laundering and terrorist financing. We follow AUSTRAC guideline to comply with AML and CTF. As part of complying with AUSTRAC’s reporting guidelines, we will report any event suspected to be involved with Money Laundering, Terrorism, Crime and Fraud.
Fraud Prevention Policy
To assist our efforts to prevent fraudulent activity, we may ask for additional proof of identity after the user has verified through our ID verification process.
All of the customer records are checked against international watch lists including but not limited to:
- Australian Department of Foreign Affairs and Trade
- Australia Crimestoppers
- Politically Exposed Persons
- European Union financial sanctions list
- Her Majesty’s (HM) Treasury List
- OFAC Foreign Sanctions Evaders (FSE) list
- UN Consolidated Sanctions
If a customer positively matches any of the aforementioned watch lists, they will not be able to verify.
What does AUSTRAC do?
AUSTRAC’s purpose is to protect the integrity of Australia’s financial system and contribute to the administration of justice through its expertise in countering money laundering and the financing of terrorism.
What is Money Laundering?
As AUSTRAC reports, every year, huge amounts of funds are generated from illegal activities such as drug trafficking, tax evasion, people smuggling, theft, arms trafficking and corrupt practices. These funds are mostly in the form of cash. The criminals who generate these funds need to bring them into the legitimate financial system without raising suspicion. The conversion of cash into other forms makes it more useable. It also puts a distance between criminal activities and the funds.
‘Money laundering’ is the name given to the process by which illegally obtained funds are given the appearance of having been legitimately obtained. By some estimates, more than AUD1.5 trillion of illegal funds are laundered worldwide each year! By combating money laundering, we can reduce crime and weaken criminals.
What is Terrorist Financing?
Terrorist financing refers to the processing of funds to sponsor or facilitate terrorist activity. A terrorist group, like any other criminal organization, builds and maintains an infrastructure to facilitate the development of sources of funding, to channel those funds to the providers of materials and or services to the organization, and, possibly, to launder the funds used in financing the terrorist activity or resulting from that same activity. Terrorist organizations derive income from a variety of sources, often combining both lawful and unlawful funding, and where the agents involved do not always know the illegitimate end of that income. The forms of financing can be grouped into two types:
- Financial support – In the form of donations, community solicitation and other fundraising initiatives. Financial support may come from states and large organizations, or from individuals.
- Revenue-generating activities – Income is often derived from criminal activities such as kidnapping, extortion, smuggling or fraud. Income may also be derived from legitimate economic activities such as diamond trading or real estate investment.
What is Fraud?
Fraud is a type of criminal activity, defined as an abuse of position, or false representation, or prejudicing someone’s rights for personal gain. Put simply, fraud is an act of deception intended for personal gain or to cause a loss to another party. The general criminal offence of fraud can include deception whereby someone knowingly makes a false representation, or they fail to disclose information, or they abuse a position. Bitcoin and other digital currency exchanges are an obvious target for fraudulent activity. Bitcoin transactions are mostly anonymous and definitely irreversible. A successful fraud attempt allows the criminal to convert fiat into digital currency. The proceeds may be used to fund other illegal criminal activities or even finance terrorism.